The head of the influential DIW Berlin Institute was quoted this week as saying he predicts a “haircut” of the Greek debt this year, in fact.
Marcel Fratzscher added, nevertheless, that a more “non-threatening” term, such as “restructuring”, will be used instead of the politically sensitive “haircut”.
His statements were carried in the jungundnaiv.de site, which caters to teenagers and young people on the German-language internet, and often broaches political issues with a lighter, alternative style.
“Often times (bailout) conditions were applied that significantly harmed people …Mistakes were made on this point,” he admitted, while adding:
“…on the other hand, many correct things were done … it was absolutely correct that loans were extended under the condition that reforms were implemented …considering that if the economy recovers then people will find work,” Fratzscher said, pointing to a significant improvement in previously creaky tax-collection mechanisms in Greece, among others.
DIW is one of the leading economic research institutes and think tanks in Europe.
